Another Misunderstood Spin-Off, page-86

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JCoure

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10/07/18

15:49

Post #: 34255776
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Originally posted by madamswer ↑

I think that one of the most valuable thing we private investors can do is to re-visit our investment theses that were formulated at the time we bought into businesses (not just where we got it right, but of even more value, where we got it wrong).

In CYB's case, the essence of the investment case was that, at Price-to-Book of 0.5x, the stock was price like ROE would remain at the then- paltry 5% level to perpetuity. Despite management's clearly articulated strategy to drive down Cost-to-Income, and hence, ROE.

With ROE now approaching 10% (which probably close to CYB's level of sustainability), and with the share price having responded, resulting in P-to-B approaching 1.0, it looks to me like most of the investment out-performance that was envisaged, has been delivered.

Accordingly, I have been selling my CYB holdings in recent days.

Of course, no investment thesis goes exactly to plan: in CYB's case there were some major seminal events that happened over the past 2 years, namely Brexit and the acquisition of Virgin Money.

Personally, this investment has reminded me yet again of the value of focusing on the underlying performance of the business itself, and not being fazed by un-forecastable, extraneous, macroeconomic events over which management has no control.
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If you have been selling, why is your sentiment “hold”? Should it not be “sell” consistent with your views and your espoused trading activity of “selling”?

CYB Price at posting: $6.10 Sentiment: Sell Disclosure: Not Held
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0 Great analysis

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Another Misunderstood Spin-Off, page-86

Top Stories

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Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

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Week 47 Wrap: HotCopper users' most watched; Brent lifts on Putin's scary letter; RFK dents CSL

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To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

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Dale Gillham's weekly wrap: Sigma-Chemist Warehouse merger creates pharma powerhouse